Weaker Asian markets drag JSE into the red

The JSE failed to hold onto the gains it posted on Monday, as industry heavyweights dragged the local bourse into negative territory.

The weaker local currency boosted rand-hedge shares, while Brent crude continued its upward trend and providing more sleepless nights for South African motorists. 

Asian markets were subdued on Tuesday as the Hong Kong market reopened after the Monday public holiday.

Tencent was down 1.92% on the day to trade at HK$317, most markets were softer on the day as it has become apparent that the US has no intention to resume trade talks with China.

The Hang Seng market closed the day down 2.38% to trade at 27 126.38, while the Nikkei ended flat at 24 270 points.

Losses continue to be recorded in the construction sector after Group Five reported a headline loss per share of R13.80. The poor performance comes on the back of  low growth and infrastructure spend by government. The group has had to cut jobs amid the slump, further impacting financial performance.

The business highlighted that they needed to have further interventions in future to support the current initiatives the company launched to remain relevant and competitive.

Shares in the group rallied on Tuesday, posting gains of 14.74% to trade at 109c a share at the close of trading. 

• READ: Oil holds gains, eyes on $100 a barrel, but Asia markets down

Gains were recorded by several miners and exporters on the day, as commodity prices responded positively to a weaker dollar. 

Sibanye-Stillwater [JSE:SGL] managed to wrestle the bears off and posted a handsome gain of 10.33% to close the day at 983c.  Gains were also posted in Spur [JSE:SUR], Lonmin [JSE:LON], Harmony [JSE:HAR] and Anglogold [JSE: ANG], recording gains of 9.67%, 9.45%, 5.88% and 4.05% respectively. 

Chemical and energy giant Sasol [JSE:SOL] posted a gain of 2.02% as the rand weakened and the Brent crude price advanced. 

Losses were recorded across the board, notably in the retail and financial counters. Invicta [JSE:INV], was among the biggest losers on the day as the engineering company shed 6.91% to trade at R35.00 per share.

Further losses were posted in Coronation [JSE:CML], Clicks [JSE:CLS], Lewis [JSE:LEW] among others, with the trio losing 5.37%, 4.42% and 4.28% respectively. 

The Resource 10 index was the only major index to record any gains on Tuesday, posting 1.69%, while the Financial index pulled back 1.63%, as the Industrial index shed 1.37%.

The All share closed the day in the red at 0.57%, with the Top-40 retreating 0.65% to trade at 55 472 and 49 263 points respectively. 

The rand continued to weaken on Tuesday and was trading at R14.38/$ at the local close. The currency continued to soften against  other majors, easing to R18.65 against the pound and R16.58 against the euro.

South African 10-year bond (R186) yields were also softer on the day, trading at 9.09% at 17:00. On the commodities front, gold advanced to $1 210 per ounce adding $18.70 on the day. Precious metals were firmer as silver and platinum advanced 2.81% and 1% respectively. 

Brent crude continued to advance as the dollar retreated in afternoon trade, with a barrel of crude changing hands at $84.95 from an intraday high of $85.25. The market anticipates that crude will trade significantly firmer from current levels, with UBS raising their 3-month trading range for Brent by $5 to $75 - $90 a barrel. 

Cryptocurrencies were mixed on the day as Bitcoin was marginally weaker, shedding 0.05% to trade at $6 568.6 per coin. Ethereum was up by 0.64% to trade at $228.